ARM 401 EXAM PRACTICE QUESTIONS
WITH DETAILED VERIFIED ANSWERS
A 5 Whys analysis is used primarily for problems involving
A. Environmental factors.
B. Technology.
C. Human factors.
D. Construction. - correct answer- C
A 35-year-old female was employed at a company for five
years. During her term of employment the company
began having financial difficulty and determined that they
needed to layoff 5 of its 125 employees in order to stay in
business. The company laid off the female employee and
4 other female coworkers. All of the women had a history
of receiving positive employee evaluations. The laid-off
workers filed a claim against the company alleging
discrimination. Which one of the following best describe
- correct answer- D
,A banking organization is attempting to control cyber risks
to their online banking site by all means necessary. A
procedural control option for them is
A. Training of employees on attitudes and behaviors to
prevent loss.
B. Centralizing responsibilities for cyber security by
appointing a chief information officer.
C. Implementing a biometrics security feature for key
personnel.
D. Using firewalls, antivirus software, and data encryption.
- correct answer- D
A chart showing the probability of obtaining the numbers
one through six on one roll of one die represents a
A. Trend analysis distribution.
B. Empirical probability distribution.
C. Theoretical probability distribution.
D. Continuous probability distribution. - correct
answer- C
A coefficient of variation is derived by
,A. Taking the square root of the sum of the squares of the
differences between the outcomes and the mean of a
distribution.
B. Dividing a distribution's standard deviation by its mean.
C. Summing the squares of the differences between
various points and a straight line on a graph.
D. Dividing a distribution's standard deviation by its mode.
- correct answer- B
A company's benefit administrator, while acting on behalf
of the company, invested 100 percent of the plan funds in
speculative stock. The return on the investment was ten
fold. The duty violated by the plan fiduciary in this
instance is
A. Diversification.
B. Prudence.
C. Loyalty.
D. Adherence. - correct answer- A
, A conscious act or decision not to act that reduces the
frequency and/or severity of losses or makes losses more
predictable is
A. Risk control.
B. Risk prevention.
C. A risk source.
D. A consequence of risk. - correct answer- A
A construction company based in the U.S. has building
contracts in five different foreign nations. The
construction company agreed to accept payment for its
work in each country's currency. The risk of loss of value
when these foreign payments are converted to U.S.
dollars is called
A. Pure risk.
B. Credit risk.
C. Exchange-rate risk.
D. Liquidity risk. - correct answer- C
A contract programmer agrees to construct a website for
a chocolate candy retailer in order to increase its on-line
WITH DETAILED VERIFIED ANSWERS
A 5 Whys analysis is used primarily for problems involving
A. Environmental factors.
B. Technology.
C. Human factors.
D. Construction. - correct answer- C
A 35-year-old female was employed at a company for five
years. During her term of employment the company
began having financial difficulty and determined that they
needed to layoff 5 of its 125 employees in order to stay in
business. The company laid off the female employee and
4 other female coworkers. All of the women had a history
of receiving positive employee evaluations. The laid-off
workers filed a claim against the company alleging
discrimination. Which one of the following best describe
- correct answer- D
,A banking organization is attempting to control cyber risks
to their online banking site by all means necessary. A
procedural control option for them is
A. Training of employees on attitudes and behaviors to
prevent loss.
B. Centralizing responsibilities for cyber security by
appointing a chief information officer.
C. Implementing a biometrics security feature for key
personnel.
D. Using firewalls, antivirus software, and data encryption.
- correct answer- D
A chart showing the probability of obtaining the numbers
one through six on one roll of one die represents a
A. Trend analysis distribution.
B. Empirical probability distribution.
C. Theoretical probability distribution.
D. Continuous probability distribution. - correct
answer- C
A coefficient of variation is derived by
,A. Taking the square root of the sum of the squares of the
differences between the outcomes and the mean of a
distribution.
B. Dividing a distribution's standard deviation by its mean.
C. Summing the squares of the differences between
various points and a straight line on a graph.
D. Dividing a distribution's standard deviation by its mode.
- correct answer- B
A company's benefit administrator, while acting on behalf
of the company, invested 100 percent of the plan funds in
speculative stock. The return on the investment was ten
fold. The duty violated by the plan fiduciary in this
instance is
A. Diversification.
B. Prudence.
C. Loyalty.
D. Adherence. - correct answer- A
, A conscious act or decision not to act that reduces the
frequency and/or severity of losses or makes losses more
predictable is
A. Risk control.
B. Risk prevention.
C. A risk source.
D. A consequence of risk. - correct answer- A
A construction company based in the U.S. has building
contracts in five different foreign nations. The
construction company agreed to accept payment for its
work in each country's currency. The risk of loss of value
when these foreign payments are converted to U.S.
dollars is called
A. Pure risk.
B. Credit risk.
C. Exchange-rate risk.
D. Liquidity risk. - correct answer- C
A contract programmer agrees to construct a website for
a chocolate candy retailer in order to increase its on-line
